Speculation Modi will create one energy ministry

Vol 17, PW 20 (22 May 14) People & Policy

DGH and oil ministry bureaucrats are excited about speculation that Narendra Modi will merge the oil, power, coal, and renewables ministries into an integrated energy ministry.

It won’t be easy and might take time but if Modi can pull it off a unified energy ministry could just deliver the rapid economic development he promised during elections. In Gujarat, where Modi was chief minister since 2001, there is just one energy department.

Talk of a national energy ministry has been around since 2005 but the previous Congress-led government lacked the will to make it reality. “If the ministries are clubbed together,” says one oil ministry joint secretary, “there will be a common objective to ensure energy security.

All these ministries only fight for their own agenda." An analyst at an international consultancy agrees, citing friction between the oil and power ministries over gas pricing and allocation, resulting in 15,000-MW of stranded gas-based power capacity.

“The power sector needs major reforms,” he adds. “It is dependent on the oil and coal sectors and if the new government wants to improve the power situation it must speed up decision making and work towards a common goal.

" A former DGH director general agrees: “Because of opposition pressure the previous government would not increase the electricity cost or gas price. A majority government can take a firm stand.

Until we increase the electricity price power plants can't afford gas at $18/mmbtu.”